OTTAWA (Reuters) - Canada's Bloc Quebecois, which seeks independence for the province of Quebec, looks set to perform badly in the May 2 general election, a development that should reassure investors and federal politicians.
Though the party fields candidates only in the largely French-speaking province, the Bloc usually wins enough seats in Parliament to make it an influential player on the federal scene and maintain the long-term threat of Canada's break-up.
Yet a poor Bloc campaign this time round and an unexpected surge for support for the left-leaning New Democrats in Quebec means the party looks to be in trouble.
"The Bloc Quebecois ... will be dramatically humbled in the next Parliament," the Ekos polling firm said Friday. The Bloc's sister party, the provincial Parti Quebecois, is currently in opposition in Quebec.
The prospect of Canada breaking up has been an ever-present political risk for decades and peaked in 1995, when a second Quebec referendum on separation only just failed.
Charles St-Arnaud of Nomura Securities International said financial markets might well welcome a weaker Bloc, since that would remove political uncertainty.
"It's always a bit of a focus, or a kind of an underlying uncertainty that they have, that if either the Bloc Quebecois or the Parti Quebecois have a strong showing in an election, it could suggest that we'll have a referendum soon," he said.
"There's always that underlying concern, that 'OK, when will the next referendum be?'" he told Reuters, saying a less impressive performance from the Bloc would "dramatically reduce" the possibility of a referendum in the eyes of markets.
The Bloc currently holds 47 of Quebec's 75 seats in the House of Commons and polls suggest it could easily lose half of them in Monday's federal election.
The party draws support from hard-line separatists -- also referred to as sovereigntists -- as well as so-called soft nationalists, who do not necessarily back the idea of independence but vote for the Bloc because they feel it will fight for their interests in Ottawa.
But Bloc leader Gilles Duceppe has fought a poor unfocused campaign, prompting the soft nationalists to take a closer look at the New Democrats, who oppose separation but have other, similar policies.
"Gilles Duceppe's personal numbers in Quebec are now dropping through floor ... I think a lot of it has to do with relevance," said pollster Nik Nanos of Nanos Research.
"Duceppe has been grasping at straws for a ballot type question in Quebec and it has eluded him," he told Reuters.
Two former senior Bloc legislators have openly criticized Duceppe for his campaign, adding to the perception that the party is struggling.
In response, Duceppe turned for support to 80-year-old Jacques Parizeau, who was the premier of Quebec during the failed referendum of 1995. The move clearly revealed the Bloc leader was giving up on the soft nationalists and looking to preserve its core separatist support.
"It's a little bit like 'Save the furniture', get all you can," said Antonia Maioni, head of the Institute for the Study of Canada at McGill University in Montreal.
"Now that the Bloc is at its real base in terms of what's going on in the opinion polls, you (have) to make sure that the sovereigntist vote is mobilized."
Reporting by David Ljunggren; editing by Rob Wilson